Tuesday’s Vital Data: Bank of America Corp (BAC), Starbucks Corporation (SBUX) and Freeport-McMoRan Inc (FCX)

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U.S. stock futures are set to bounce back this morning, as Wall Street prepares for a round of economic data that could set the tone for a potential rate hike from the Federal Reserve.

Tuesday’s Vital Data: Bank of America Corp. (BAC), Starbucks Corporation (SBUX) and Freeport-McMoRan Inc (FCX)On the docket is the preliminary reading for the August manufacturing purchasing managers index and July’s new home sales figures. The Fed will meet at Jackson Hole, Wyoming, on Friday, and Fed Chair Janet Yellen’s speech will be closely watched.

Heading into the open, futures on the Dow Jones Industrial Average are up 0.23%, while S&P 500 futures have also added 0.23% and Nasdaq-100 futures are up 0.26%.

Options activity dropped off dramatically on Tuesday, as positioning in the wake of Friday’s August expiration came to an end. Overall, a below-average 12.7 million calls and 10.1 million puts crossed the tape yesterday. Over on the CBOE, the single-session equity put/call volume ratio rose to 0.63, driving the 10-day moving average higher to 0.60.

Helping push Monday’s options activity, a U.S. appeals court refused to reconsider its ruling to overturn a $1.27 billion penalty on Bank of America Corp (NYSE:BAC). Elsewhere, Vetr is all in on Starbucks Corporation (NASDAQ:SBUX) after upgrading the stock, while Freeport-McMoRan Inc (NYSE:FCX) drew ire from technical traders following FCX’s breakdown.

Tuesday’s Vital Options Data: Bank of America Corp. (BAC) and Starbucks Corporation (SBUX) and Freeport-McMoRan Inc (FCX)

Bank of America Corp (BAC)

BAC stock dipped nearly 0.3% on Monday amid broad market selling, but the stock is looking to bounce back today. As traders largely expected, a U.S. appeals court refused to change its ruling on overturning a $1.27 billion penalty and a jury verdict finding Bank of America liable for mortgage fraud ahead of the 2008 housing crash. While the ruling made headline news, BAC traders are likely more focused on this Friday’s Fed meeting in Jackson Hole, with a focus on the potential for future interest rate hikes.

Options traders were quite active on BAC yesterday, with more than 313,000 contracts changing hands in a down-volume session. Calls edged out puts on the session, capturing 54% of the day’s take. Short-term put traders remain focused on the $15 strike, where some 16,000 contracts reside in the weekly August 26 series. Call traders, meanwhile, have shifted their attention to the $15.50 call strike, piling on more than 40,000 contracts in the series, and creating a serious options-related hurdle for BAC stock in the short term.

Starbucks Corporation (SBUX)

SBUX stock has been in a bit of a rut since the beginning of August, declining nearly 5.5% through the close on Friday. The shares got a lift on Monday, however, after Vetr upgraded SBUX stock to “strong buy” from “buy.” Vetr currently sports a price target of $61.77, an 11.35% premium. Starbucks rallied 1.66% following the upgrade.

SBUX traders took note of the bullish activity, flooding the shares with call options yesterday. Overall, some 166,000 contracts traded on SBUX, with calls accounting for 85% of the day’s take. The recent attention to SBUX calls has driven the stock’s August/September put/call open interest ratio lower from a perch near 0.85 to its current reading of 0.78.

Peak call OI for the weekly August 26 series totals roughly 3,400 contracts at the out-of-the-money $59 strike, though it would take quite a rally for SBUX to challenge this strike by Friday’s close.

Freeport-McMoRan Inc (FCX)

FCX stock may be in danger of a bearish run lower over the intermediate-term — that is if technicals have anything to say on the matter.

After consolidating into support near $12 for the past month, Freeport-McMoRan breached this key support level on Monday, taking out its 50-day moving average in the process. FCX had also seen pressure from its declining 10-day and 20-day moving averages.

The shares last dipped below their 50-day trendline in early July, and Monday’s breach could be a sign that the stock is set to test the $10-$11 region before bouncing back.

Options traders picked up on the technical breach in a hurry, with puts snapping up 57% of the more than 159,000 contracts traded on FCX yesterday. FCX is now trading below all major call and put OI strikes for the August/September series, save a growing accumulation at the $11 strike.

Taking a close look at Monday’s action, data from Trade-Alert.com points to 16,000 put contracts that were sold (possibly to open) at the Sept 16 series $9 strike. Furthermore, another block of 8,000 puts traded at the ask (possibly bought to open) on the September $11.50 strike.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/08/tuesdays-vital-data-bank-america-corp-bac-starbucks-corporation-sbux-freeport-mcmoran-inc-fcx/.

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